Michaelís Consumer Column

This Dog Will Hunt

The treasure hunt phenomenon is driving the action in virtually every category of consumer goods and services, including one of my favorites, pet food.

In Trading Up, we wrote about the national obsession with pets—some 62 percent of America's 110 million households include a creature of some kind. People want good health for their dogs and cats (and there are about 162 million of them in this country) as much as they want it for themselves, a sentiment that has fueled the exceptional growth of such premium pet food brands as Nutra, Diamond, Eagle Pack, and Bil-Jac.

As much as people love their pets, however, they also are intense value seekers. If they can purchase good, nutritious food for the nonhuman members of their households at a lower price, many will go out of their way to do so.

That's probably why Mars Incorporated recently purchased Doane, the largest private- label supplier of pet foods, a company that services the big specialty retailers, national grocery chains, and mass merchandisers. Doane, in fact, is the company behind Wal-Mart's popular Ol' Roy dog food.

Until now, Mars has been represented only at the high end of the pet food category, with its premium Pedigree and Whiskas brands, and holds the second largest share of the market after arch-rival Nestle Purina. The purchase of Doane suggests that Mars understands how important the trading down segment is and plans to go after it in a big way.

Consumers make important decisions about their spending every day. For most purchases, they're looking to buy the things they need at the lowest possible price. Now and again, they'll splurge on a special item of great value to them. Mom and Dad and the kids all have learned that cheap can be good. Now it's Rover's turn.